10 Lucrative Real Estate Investment Opportunities 2024 & Mistakes to avoid

Hello, ladies and gentlemen, those that are viewing Business Hub UG, welcome back. Sorry, my voice today is more deeper than usual because I have a cold and I had a long weekend of a function. But I hope it doesn't make you very uncomfortable in your ears. So today we are going to be talking about real estate. I deal in real estate. I am the CEO of Roland Ventures Ltd. And we deal in real estate. And today I am here to share our secrets, the business opportunities that exist in that sector. You have read, you have heard, you have known. I am here to tell you that real estate is one of the most booming sectors actually in this country, Uganda. Because I have, I started out, I will tell you my story. I started out with just buying a plot of 10 million, which I later on converted and sold for about 25, 30 million, which I bought from a real estate. I kept growing, buying different plots and reselling, got into now you construct and sell. So, so many of the things that I've done and currently now we buy chunks of land and subdivide them and then we sell out plots. So we have, this will be an announcement. You will see the estates that are currently running. We have one on Gayaza Kalaji Road. We have one in Satellite in Poma. We have another in Sasa. So you could reach out and if you're interested, my numbers are up there. You could support the business. So straight into the business opportunities that I see in this sector that I feel I need to share with you. So if you have the money, choose real estate. I know the challenge is many of them say, or not saying, but that's the truth, that it's a capital intensive venture. Because whereas you can start any other business with 500,000, you may not start that when it comes to real estate. Unless you're buying very deep in a village where they're just giving you a small plot where you can put maybe what, a small car room, but you'll not have a washroom space. So anyway, one of the opportunities that exists in this sector is for you to be able to actually buy plots and resell them. That's something I have done. And from my experience, the best way to do this is for you to buy from registered property agents, like real estate dealers. They have a name. You have Roland Estates. You had the Jumai. You had the Royale. You had the Jumcos. You have so many of the people, the individuals of the companies that are actually real estate registered entities. It's also important that you actually pay attention to how legit they are. Because I know whereas very many are legit, they are those that actually come to scam. Even the scammers hide in the legit ones. So that's an opportunity that you can take on. That's one of the ideas. You could buy a plot in an estate. Buy it about what? If you're starting, even 10 million is okay. Because I bought my first estate, my first plot in Ranyoni. It was in Royale Estate at that point, at that time, which was in around 2015. That's how I started now. I've grown to now where I am. I am now an agency. So you could buy plots. Why I would advise also to actually buy from the real estate people is development comes faster. And it's easy for you to get a buy. Because someone who bought and built, at that time they could only afford a plot. Over time, even when you don't want to build and you've bought it, they will actually ask for that plot. Because they want to use it as a compound. And the other thing that I've actually also learned with buying plots and then selling them after a given period of time. High trading plots appreciate faster than the low cost. What am I trying to say? If you bought a plot at 5 million, the rate at which it appreciates versus a plot that you've bought 80 million. If you go to places like Chisasi, proceed, Kulambiro, Chisasi, Chira, where you're getting a plot running between maybe 90 to... That's a 50 by 100 plot running between 90 to maybe 120, 150. I have had occasions where you buy a plot today. And the next day someone comes and they badly want it. And they're adding in 30 million to take your plot. Which is a secret that I have actually also discovered. That the cheaper the plots, most times their rate of appreciation is low compared to the higher cost ones. But for purposes of maybe the risk to manage the risk if you are a starter. I would advise that you start with the low cost for you to understand the business and how it trades. Now, the second other opportunity that exists in the real sector is for you to actually buy big chunks of land and subdivide. This is something that I currently do as Roland Ventures Limited. You go and buy about an acre, two acres, three acres or whichever acres that are available depending on your capital. For every acre of land, one hectare, one acre, you're able to get eight plots. So if you're getting eight plots out of this, you're doing about standard is 11.5 to 12 decimals. That's the 50 by 100. So if you're looking at 100 decimals, how many plots are you able to get out of that? This becomes profitable because when someone is selling to you a big chunk of land, they sell it cheaper than you're selling a plot. What do you need? After you've done that, get a surveyor. Get services of a surveyor. Surveyors usually charge about making a title for each plot. They'll charge you between 800 to 1.2 or 1 million depending on how many plots they are. But you have them charging you 800,000 to process for you a title for every plot. So multiply by the number of plots that you want to do depending on the standard size. Make sure you have roads that are sufficient, that are going to attract the people. Avoid buying the swamps. Sometimes we think that we are buying cheap because we are buying in the swamp. But the authorities come for you. Over time of me doing real estate, what I have learned, you do not get a lot of money. The demand of the plots that are in the wetland is very low. So you end up selling them at half a price compared to the land that is on above. Unless you're buying this land, you're buying the big chunk of land and you want to sell it to someone who is into agriculture. Someone who is going to be looking after poultry, after any of those things because they will need the water. So depending on the purpose of the land that you're buying. But if you're buying for real estate dividing, look out for the topography. Because if the topography is bad, it will cost you in even construction, it even costs the client. So people will not come for the land. Thirdly, there is an opportunity for you to build and rent. What is this? Like buy your land instead of you selling it off. Buy the land and actually put up rentals, put up accommodation. That's also another opportunity. Put up a building where people can have the shops, where other people can have and sleep up as accommodation. Buy and build and rent. I know from my experience, if I'm going to be honest, with building to rent versus building to sell. Building to rent ties up the money and is not as fast rewarding as build to sell. Because now build to sell is another opportunity. But build to rent, on the other hand, if you're a person who is building for legacy, if you're building for children, if you're a person who is risk averse really, that you fear risk of at least let me do one and settle down and concentrate on that. But if you want something that is able to turn your money around, I would recommend that you do the build to rent. Now, one secret I need to tell you about building to rent is I made a mistake at one time when I first started is while I was building, I put so much passion and forgot that this was big business. So you end up sinking in so much money without considering how much rent you're going to recoup. Return on investment for build to rent to get out your money. Even if you wanted to sell that property at a later time or you want to build, do not invest money that is going to have to give you a return period that is beyond 15 years. What am I trying to say? If you're going to buy a property, calculate the land. First, identify why are you buying this land? I want to build and build rentals. Ask yourself, what kind of rentals do I want to build? Sitting room, bedroom. How much are they trading in that area? Sitting room, bedroom is 500,000 in this area. How many rentals are able to go in this place? They are going to be four. So if you're going to do four, it means you're going to get 2 million shillings per month. 2 million times 12, okay? Then you get your 24 million. Now, you calculate 24 million, then calculate it by 15 years. Now, the total that you get, that is the maximum that you should sink in a property. Actually, people calculate better. For you to know that you've done a good deal is for you to be able to build and know that your recouping period is not more than 10 years. But if you stretch and find yourself between 15 years and you want to sell that property, you will not get people sell or buy that property from you like you would have done it. So that's important. And then the second secret that I actually learned from that, the bill to rent, is invest in the land than more in the building. What do I mean? We get, I'll give you an example. I wake up and go and get land, buy it 50 by 100, buy it 30 million to 35 million. I buy it in Seta, Odipa. Now, sitting room, bedroom, and it's kitchen, in, toilet, bathroom. They'll give you rent of 350, 400,000. But then you're going to invest in a facility and put a gate, put security, put cameras, put tanks. And the facility is looking so good because you've not asked. In your head, you're thinking you're going to charge as the way Nigeria is charging 700,000 for such facility. And then you will discover that they're giving you half price. So recouping your money takes time. Reason being people put into consideration the distance from their workplaces, the distance from the city center if they want to trade. So I would rather that you walk to, go to your, go to Wate, go to Chira, buy a plot and invest in the plot, buy 100 million, buy 80 million. 80 to 120 million, you're buying a 50 by 100. You're going to put up a facility, storage, even if it's one level, two, even if it's not storage. You will have invested the money in the land, but you will have demand and high return on investment as opposed to someone who bought the land at 35 million and invested much more money like you invested. I hope I'm clear on that. So that is another thing that I learned. Invest in the land, more in the land than the facility. Because you say in Luganda, like good things sell themselves. The property is accessible. The property is in a good place. The property is in a place that is going to attract the kind of people that you're looking for. And it will earn you that. Then secondly, if you've really chosen to go, if you've really chosen to not invest in the land and go away and say maybe invest in, I'll do, maybe I'll do a hostel, I'll do a low-cost housing. I can tell you that I've actually discovered that low-cost housings reward. Now, they only reward or they are only highly rewarding because you can have seven payback period. You have about six to seven or eight years as opposed to ten for the high. What do I mean? Because if you're going and you're building an apartment and you're building a family house, you're going to charge about 1.2 million. You need to prepare for parking. You need to do bigger rooms. Then they will tell you, I want a space where my children can play. I want a place where I can do a birthday party. And in your head, you're calculating and you're thinking about this. So what you do, you end up leaving a lot of your space unutilized because you're creating facility. As opposed to someone who has gone and is building for, I'm targeting the youth that have just left university. And then all they have is a studio room. Now, you have constructed a three-bedroomed house. The money versus the person who has divided that space into a studio room. Studio in the sense of the people have a space to put their bed. They have a wardrobe. They have a little wardrobe. They have a little kitchen and a toilet and bathroom. Given the rest of the economy and how it is running and then knowing that you have the most people as the youth, as the young people. Those facilities never run out of tenants. And then you have very many of them in the same facility. They are not driving. They are not concerned about where are my children going to play. They are not even married, no children. So you end up benefiting more. So those are part of the secrets that I've learned from Build to Rent. Ladies and gentlemen, there's also an opportunity if you don't have the monies to actually buy the land, build. Did you know that you can rent and then sub-rent? That's how most of the people in this town are actually making money. Look out for anyone that is in the business center, in the central business center. Most people that actually own the shops or the space are not the owners of the building. The building is coming up. Go out. Book up one of the rooms. Sub-divide it. Sub-rent it. Now what happens, other people are paying you rent for you to pay your landlord. In the end, you end up trading in a place free of charge. And you're saving on rent costs because you are sub-renting. And I have seen this as, which is the same thing that happens. I told you I do Airbnb. You have, it's more like the same concept. Whereas you would know that other people put the facilities they own, Airbnb actually allows you to put a facility even when you don't own it. What do I mean? I have gotten my house. And I feel like, okay, I am a person who is never always available. Or I have an alternative where I have maybe a room that is provided already on my parents' house or any other facility. Or I actually rent the house fully and I know it's Airbnb, whereas I have another facility. You rent this facility at $500,000, okay? Let me work with the figures of the uptown or where I know most of us are familiar with or what I'm familiar. You rent at $550,000 per month. You furnish this facility. You put it on Airbnb. Look around for the charges around that place. Usually most of the Airbnbs you'll find the facilities that fall in the category, the ones you're able to rent if it's sitting room, kitchen, and toilet, and bathroom. Usually those facilities and where they are located, it's gated. You have to make sure you have your facilities like Wi-Fi, you have good parking, and you have security. You're getting a person pay you between $70,000 to $100,000 per stay or per night or what you call per day. If you look at $100,000 for the 30 days or assuming all the 30 days in a month are not expired, take out the $5,000 or even if I left you with $20,000, $20,000 times $100,000, ladies and gentlemen, that's $2 million shillings versus the $550,000 that you have invested in paying your landlord. You don't necessarily have to build for you to be able to make money from real estate. The other opportunity that exists is brokerage. Brokerage, you get properties, understand you have the time, move around, understand, get people that are selling their properties. The people are there, they have, but they don't have the time or they don't know where the market is. You have a brokerage fee, usually it's 10 to 5. When they negotiate down, sometimes they push you to 5. But it's 10% for your brokerage fee of any properties that you market and sell. So why not use that social capital that you have? Why not take advantage of your connections, of your being social, of you knowing the people that have the money, of you knowing where the money is, of you knowing where the better premises are. So one, establish that the properties that you're selling are legit because you don't want to end up in jail because you're selling, you fraudulently sold that property. And then do the brokerage, market, open up your social and market people's properties, get the money. There's also an opportunity of property management, ladies and gentlemen. Real estate is rich. It's rich. You're able, I build a property, but because you have a time, you open up your facility, you're able to manage my property. Manage it in what sense? One, some, you supervise it even when it's under construction. That's part of management. Properties that are already constructed, the people, the funders, the people that are putting the money may not have the time to deal with the nitty-gritty things and complaints of clients, but you become their face. The clients reach out to you. You're the face. So at the end of it all, you charge your commission for the services you offer. You're the person who keeps knocking. You are the assistant landlord. You're the one who knocks and collects this money. Now, that is a business opportunity. You are youth, you've left campus, you've left university, you have the energy. Instead of sitting home, instead of lacking what to do, you are a person who is unemployed. Look out for that. That's also an opportunity. Now, finally, in the business sector of real estate, the other thing that I can point you to is construction. Ladies and gentlemen, do you realize that whatever we've been talking about actually involves putting these facilities together? Like, if I'm talking about building, then it means they are going to need to construct. So, look out and position yourself to be able to be that go-to person that is over and over those services. The services of materials. You can choose to invest in the materials that are used in real estate because you identify an area that is growing very fast, where you see there's a lot of construction that is happening. All you need is rent someone's property land, put China Link and your security, poor materials, go buy materials from afar, bring them closer to the people, liaise with the people of the hardwares, and be able to work with them. Ladies and gentlemen, I feel those are some of the opportunities. I know there are very many opportunities in the real estate sector, but that is what I needed to share with you, and there is very much more. I encourage you to go out there and read, find out, research, put in your effort, put in the knowledge, put in the planning, and invest in that business. Beware of whatever is required, the legal requirement, the ownership of the land. We'll get into that. We'll get the lawyers to teach us and to tell us what the different types of ownership of land that is authorized in Uganda, and then also the costs vary in that regard. Thank you for watching. Till next time, bye-bye. ♪♪♪